Propane prices on rise

February 10, 2014

By Eric Norwood Jr.CNJ staff writerenorwood@pntonline.com

Propane shortages in the midwest and northeast parts of the country have made national headlines in the past month as the price of propane has skyrocketed. The shortage has yet to hit Clovis, which has plenty of propane, according to Farwell Fuels director of operations Kenneth Waters.

“We have plenty of supply. They have a shortage in the northeast, and they are pulling a little from our supply, but local supplies are good,” said Waters.

The supply is not the issue that the people of Clovis have, but the price, which has risen steadily since the beginning of winter.

“I paid $35 for a 30-pound tank of propane. It normally costs $20,” said Sean Poindexter, a professor at Clovis Community College who uses propane to heat his home.

Retired Clovis resident Daniel Nance is irritated with the rising prices as well.

“The price for a 100-pound tank is $110, where I was only paying $80 last summer. It annoys me that I have to pay that extra $30. That is a half a tank of gas, or a couple cases of beer,” said Nance.

Reasons for rising prices include logistical issues stemming from maintenance and repair work done to a major fuel pipeline and railroad that ships supplies out of one the biggest propane hubs in the country, Conway Oil in Kansas. Cold temperatures are also a main cause, as the midwest and northeast has been battling freezing cold conditions all winter.

“I think it is primarily the extreme cold weather in the northeast that has increased national demand, but our demand locally is about normal,” said Waters. Propane exports have also been linked to the cause. American-produced propane made up more than 20 percent of the total sold on the world market in 2013, a more than 15 percent increase since 2008.

The market nationwide has been affected, including in Clovis. Demand may be the same, but because the national price goes up, propane suppliers like Farwell Fuels must adjust to stay in business.

“We’re sympathizing with our customers. Any price movement is directly attributed to the price when we buy,” said Waters.